Best Way to Revamp Income Tax Might Be a Do-Over

A 1917 World Series Program, featuring President Woodrow Wilson on the cover, sold for $4,800 at a May 2017 Heritage auction.

By Jim O’Neal

In 1912, after 16 years in the wilderness, Democrats seized control of Congress and the White House, with Woodrow Wilson as their leader. To their disappointment, the new president kept celebrations to a minimum. He delivered a brief inaugural address on March 4, 1913, canceled the inaugural ball, and reviewed the parade with stoic forbearance. This is not a day of triumph, he declared, but a day of dedication. And it was a day to muster the forces of humanity, not the forces of party.

Wilson went on to produce the greatest outpouring of social legislation Americans had ever experienced, during a brief period when the ruling class would use Hamiltonian means of a strong federal government to bring about Jeffersonian ideals of egalitarianism. His presidency would transform the American banking and currency system, create new industrial and farm policies, and expand the protection of America’s natural resources. But the first accomplishment was lowering tariffs and enacting an income tax – reforms aimed directly at middle-class pocketbooks.

Wilson and his associates sincerely believed that the federal government needed to serve as a counterweight to corporate wealth and an aggressive agent to help ordinary citizens. Wilson’s legacy is often cited as a fateful turning point when “do-gooders” harnessed the income tax to both raise revenues to grow government and to redistribute the wealth of Americans in a way they viewed as more fair. Yet at the outset, no one could foresee that war, not social justice, would start an inexorable rise in taxes that would thwart all the moral absolutism dreamed about.

Starting the day after his inauguration, Wilson called Congress into an extraordinary session for a historic assault on the tariff system by delivering his message personally in the first presidential appearance inside the Capitol since the days of President Jefferson. Although he recognized the challenge he faced due to conservative committee barons who dominated Congress, despite being Democrats, Wilson stood with his progressives and intended to use his executive power to the fullest. By September, the Senate actually passed a tariff bill that helped consumers … a historical first.

However, there was the small issue of how to plug the $100 million loss of revenue that was created. And so we now meet the federal income tax, which turned employers into tax collectors. New York’s The Sun summed up the opposition by arguing that income taxes were repugnant except in times of great national emergency and charged “it amounted to taxation of the few for the benefit of the many.” Advocates claimed it was merely a way to tap the “surplus” income of the rich – “over and above the amount necessary for good living.”

On May 8, 1913, the House approved the first income tax that would actually take effect since 1872, when Congress repealed Civil War-era taxes. But the Senate disagreed, with some senators opposing the “confiscation of property under the guise of taxation” and others saying “No honest man can make war upon great fortunes per se.” The war of words continued until a law was passed that affected fewer than 4 percent of Americans, with working-class people virtually excluded. A 1 percent rate on $20,000-$50,000 graduated up to 6 percent on $500,000 and above. There was also a 1 percent flat tax on corporations.

After two years, everyone seemed angry at Wilson for doing either too much or too little. Feeling besieged, he entertained a fantasy of putting on a beard and sneaking out of the White House prison, or putting a sign in front of his office: “Don’t shoot! He’s doing his best.” The reform agenda was mobilizing to act when…

In June, a shot rang out at Sarajevo.

World War I would eventually cost the United States $50 billion and the federal budget grew from $742 million in 1916 to nearly $14 billion in 1918. Excise taxes and tariffs had been providing 90 percent of federal revenue and this was limited. What to do?

Thus started the long story of the U.S. income tax, which at one point grew to 90 percent and has become so complex not even the IRS knows with certainty what lurks on all 50,000 pages of highly technical jargon (or even if 50,000 pages is accurate!). It grows each day … as does the debt that is back in the news.

My recommendation to President Trump is to simply start over, since every effort to reform only adds more pages and complexity. Take a blank piece of paper and write down “Need 18 to 20 percent of GDP to run federal government. Question: What is the best way to get this money and do the least damage in the process?” Answer: Find three smart people to figure it out, then just do it … fast.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Labor Secretary Perkins Did Her Part to Make Sure Social Security Endures

A Feb. 27, 1935, memo by President Roosevelt to Francis Perkins regarding Social Security went to auction in December 2008.

By Jim O’Neal

President Theodore “Teddy” Roosevelt created the U.S. Department of Commerce and Labor on Feb. 14, 1903. It was renamed the Department of Commerce in 1913 and various bureaus and agencies specializing in labor were shifted to a new Department of Labor.

Until 1920, women were prohibited from having Cabinet-level positions since they were not allowed to vote. President Franklin D. Roosevelt broke this barrier in 1933 by appointing Francis Perkins as Secretary of Labor. She was instrumental in aligning labor with the New Deal.

The New Deal was a complex integrated plan to provide present relief, future stability and permanent security in the United States. Much of the president’s thinking about security – which would soon come to be called “social security” – rested on a premise that overcompetition in the labor market depressed wages, spread misery rather than income, curtailed the economy and worked special hardship on the elderly.

Roosevelt was determined to find a way to “dispose of surplus workers,” in particular those over the age of 65. The federal government could provide immediate relief to able-bodied workers as the employer of last resort, while returning welfare functions to the states. Unemployment insurance would relieve damage from economic downturns by sustaining workers’ living standards, and removing older workers (permanently) through government paid old-age pensions would create broad economic stability.

The longer-term features of Roosevelt’s grand design were incorporated into a landmark measure whose legacy endured and reshaped the texture of American life: the Social Security Act. No other New Deal measure proved more lastingly consequential or is more emblematic of the very essence of the New Deal. No one was better prepared to thread the needle of the tortuous legislative process than Secretary of Labor Francis Perkins and FDR personally assigned her the task of chairing a Cabinet committee to prepare the legislation for submission to Congress.

Madame Secretary (as she preferred to be called) brought to her task the commonsense practicality of her New England forebearers; compassion of the special milieu from her time at social-work pioneer Jane Addams’ Hull House; and a dose of political expertise gained as a labor lobbyist and industrial commissioner in New York. Perkins had evolved from a romantic Mount Holyoke College graduate, who tried to sell “true love” stories to pulp magazines, into a mature, deadly serious battler for the underprivileged.

She owed her position to a comrade-in-arms relationship with New York Governor Al Smith and FDR in New York reform battles and also the spreading influence of an organized women’s faction in the Democratic Party. She wisely believed that enlightened middle-class reformers could do more for themselves through tough legislation than union organization; and without the distraction of industrial conflict and social disruption.

Meanwhile, the American labor movement, led by the stubborn Samuel Gompers, relied exclusively on protection of labor’s right to organize. Even after his death, his American Federation of Labor (AFL) spurned legislation and continued to bargain piecemeal, union by union, shop by shop … a strategy that collapsed as the depression deepened.

We know how this ended on Jan. 17, 1935, when President Roosevelt unveiled his Social Security program. Today, 61 million people – or one family in four – receive benefits. However, there is no “lockbox” for Social Security and the flow of taxes and benefit payments are co-mingled with all General Obligations; which includes Medicare, military spending, food stamps and foreign aid. Everything is dependent on the federal government’s ability to levy taxes and borrow money to fund the unsustainable debts backed by “the full faith and credit of the United States.”

Some say that when it comes to global sovereign debt, we live in the best house on Bankrupt Street. However, I am willing to bet that FDR’s cherished Social Security program will never be touched. Francis Perkins did a superb job of getting this concept engrained in a special way and she must still be smiling. She liked her work and served for 12 years and one month – almost a record. James “Tama Jim” Wilson holds that distinction, serving as Secretary of Agricultural from 1897 to 1913, the only Cabinet member to serve under four consecutive presidents, counting the one day he served under Woodrow Wilson.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

President Andrew Johnson Narrowly Escaped Removal From Office

A cotton bandanna made to celebrate the end of the Civil War, featuring President Andrew Johnson, sold for $9,375 at a November 2013 Heritage auction.

By Jim O’Neal

Andrew Johnson was Abraham Lincoln’s second vice president after they won the 1864 election running on the National Union Party ticket (a one-time name change for the Republicans).

After Lincoln’s assassination, Johnson was drunk at his own inauguration and later was the first U.S. president to be impeached. He was acquitted in the Senate by a single vote.

A classic Southern slavery advocate, Johnson was elected to the U.S. Senate after his presidency (a first).

This William Howard Taft and James Sherman jugate pocket mirror sold for $2,629.

James “Sunny Jim” Sherman was vice president No. 27 under William Howard Taft. He was the first VP to throw the first pitch on baseball’s opening day, and the last VP to die in office.

His death right after the convention on Oct. 30, 1912, didn’t give Taft a chance to select an alternate so Taft campaigned alone (finishing a weak third despite being the incumbent president). Taft and Theodore Roosevelt (who was attempting to make a comeback) split the vote, giving Woodrow Wilson the win.

Franklin Delano Roosevelt ran for the WH five times (for VP in 1920) and was successful four times. His mother, Sara Delano Roosevelt, was the first woman to cast a vote for a son in a presidential election (1920).

Roosevelt famously had White House matchbooks printed with “Stolen from the White House,” perhaps to cut down on souvenir-seeking guests.

Levi Parsons Morton, the 22nd vice president, missed the chance to be president when he declined James Garfield’s offer to be his running mate in 1880.

Garfield then turned to Chester Arthur, who accepted and became president upon Garfield’s assassination in 1881.

After his term as VP, Morton became the only one to then become a governor (of New York). He lived exactly 96 years – dying on his birthday in 1920 (another first and only).

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Fairbanks Never Won the Presidency, But there is That City…

A rare 1904 Theodore Roosevelt and Charles Fairbanks jugate (with a cartoon image by the creator of the Teddy Bear, Clifford Berryman) sold for $8,050 at a June 2005 auction.

“To be, or not to be, that is the question.” – Prince Hamlet in William Shakespeare’s play Hamlet

By Jim O’Neal

Charles W. Fairbanks gave the keynote address at the June 1896 Republican Convention in St. Louis. Following the successful nomination and election of former Governor William McKinley of Ohio, Fairbanks became a U.S. Senator from Indiana.

When 1900 rolled around, Mark Hanna – one of the earliest “kingmakers” in American politics – tried to persuade Fairbanks to run as McKinley’s vice president (Vice President Garret Hobart had died in office). But, Fairbanks thought he had a better chance to become president by staying in the Senate.

Bad decision.

McKinley was assassinated in 1901 and Vice President Teddy Roosevelt became president. Fairbanks recognized his earlier lost opportunity, so in 1904, he accepted the vice presidency with TR in the hope that his shot at the presidency would come in 1908.

Wrong again.

Roosevelt threw his support to friend and colleague William Howard Taft and that squashed Fairbank’s aspirations once again.

Now flash forward eight years to 1916, and we find our old friend Fairbanks running for vice president again, this time with former Governor Charles E. Hughes of New York. Alas, Woodrow Wilson was reelected and Fairbanks finally just gave up.

However, he does have a major city named for him, albeit few people can find it on a map.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Vice President Agnew Believed They Were Out to Get Him

Spiro Agnew in his memoirs suggested Richard Nixon and Alexander Haig planned to assassinate him.

By Jim O’Neal

Spiro Theodore Agnew was elected vice president twice … in 1968 and 1972. However, he became the second vice president to resign in 1973. Although accused of several crimes along the way, he finally pleaded no contest to a single charge of not reporting $29,500 income in 1967.

Lesser known is that in 1995, his portrait bust was placed in the U.S. Capitol. An 1886 Senate resolution stipulated that all former VPs were entitled to a portrait bust in the building. Agnew proudly attended the formal ceremony.

He later claimed that both President Richard Nixon and his Chief of Staff, Alexander Haig, had threatened to assassinate him … “Either resign … or else.” (That would have really been a first!)

Grover Cleveland served two non-consecutive terms as president – No. 22 and No. 24.

He was the first Democrat elected after the Civil War, which he conveniently sidestepped by hiring a replacement to take his place in military service.

Some of his firsts include:

• Only president to admit fathering an illegitimate child.

• First and only president to marry in the White House.

• First president to have a child born in the WH.

During the Panic of 1893, he secretly had a cancerous jaw replaced with a rubber mandible. It was done on a yacht at sea to avoid spooking the markets. Perhaps the absence of any “leaks” was because he was a tough man who had (personally) hung two crooks when he was a sheriff in Buffalo.

Thomas Riley Marshall is still a relatively obscure vice president despite serving eight years (1913-21) with Woodrow Wilson, and in 1916 becoming the first VP reelected since John Calhoun (1828).

Many historians argue that he should have assumed the presidency when Wilson suffered his debilitating stroke, but a small group around Wilson (including his wife) were able to keep it a secret. Some Wilson signatures appear to be forged, however Marshall had little interest and confined his duties to calling each day to inquire about the president’s health.

Marshall is famously credited with saying, “What this country needs is a really good five-cent cigar!”

Three of our first five presidents died on July 4, as did Abraham Lincoln’s first VP, Hannibal Hamlin.

Calvin Coolidge Jr. was born on that historic date. After President Warren G. Harding died in San Francisco in 1923, Coolidge assumed the presidency and won re-election in 1924. His father swore him in in 1923 as he was a judge/notary.

“Silent Cal” was a real tax cutter, and by 1927, 98 percent of the population paid zero income tax. Plus, he balanced the budget every year and when he left office in 1929, the federal budget was lower than when he started.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Wilson Turned Conscription into Act of Public Patriotism

This World War I recruitment poster for the U.S. Army sold for $13,742.50 at a November 2015 Heritage auction.

By Jim O’Neal

One hundred years ago this month – in June 1917 – 10 million men between the ages of 21 and 31 started lining up to register for military service in the United States armed forces. President Woodrow Wilson had decided in 1916 to make one last effort to end World War I and made an offer on Dec. 18 to mediate a peace, pending both sides specifying their acceptance terms.

The Central Powers had no interest since they were confident of victory. The Allies – who had no sincere interest in peace – stipulated that their enemies had to dismantle and disarm.

Wilson’s offer was allowed to lapse, which ensured two things: First, the war would continue, and secondly, the United States would be forced to abandon a policy of neutrality and issue a formal declaration of war on Germany. Congress enacted it on April 6, 1917.

Once committed to hostilities, America’s extraordinary capacity for industrial production and human organization took over. A conscription system was created and the Selective Service Act enacted on May 18, 1917, to build a national army through compulsory enlistment. Aware of the nation’s reluctance to get involved, Wilson cleverly created local civilian registration boards, which decided whether individuals entered active service or stayed on the civilian side to support the badly needed build-up efforts.

Over 24 million men registered in 1917-18 and those deemed most eligible – young, unmarried males without dependents – formed the first contingent of 2.8 million draftees. The public nature of this process transformed the dread of being drafted into a spirit of public patriotism. It was almost magically and remarkably different from the Vietnam situation 50 years later.

Only 10 percent to 11 percent of those eligible tried to evade the mandatory registration and local communities had designated people to track down the “slackers” who were required to carry proof of registration via a draft card. If anyone was nabbed without one, they were put in jail and publicly humiliated.

Families proudly put a Blue Star in their home windows whenever a family joined the military, and let their neighbors know they were “Enrolling in Liberty.” Gold Stars were displayed if a death occurred. Soon, registrants started wearing lapel pins or ribbons to advertise their status since there were five classes for draft deferments. So you could register publicly, but then privately apply for a deferment.

Naturally, there were problems since 20 percent of draftees were foreign-born citizens, but any suspicions were allayed when the bullets started flying. Another major issue was that the Army was strictly segregated and about 90 percent of black men were assigned to non-combatant roles. In a pleasant twist, those sent to France were given special treatment by the French people, who welcomed them into their homes. For those from the Jim Crow South, this became an exciting adventure.

Under current law, all male U.S. citizens between 18 and 25 are required to register with the Selective Service within 30 days of their 18th birthday. I wonder how many are aware of this law? However, the last prosecution for non-registration was in January 1986, so I guess they are safe.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

American Forces Quickly Rallied to Face German Aggression

Tom Lovell’s World War I Soldiers on Horseback, painted for a magazine story illustration, sold for $8,750 at a March 2012 Heritage auction.

By Jim O’Neal

At the start of 1917, only four months before the United States declared war on the German Empire, the U.S. army totaled 107,641 men. Sixteen other nations had larger armies. Another major weakness was the lack of recent experience in large-scale military operations. It had been a full 51 years since the armistice at Appomattox had ended the Civil War and many things had become rusty in the interim.

Also, somewhat remarkably, there was no modern military equipment heavier than medium-size machine guns!

Even the National Guard was larger (132,000 men), but this part-time militia was dispersed among the 48 states, generally poorly trained, and any federal oversight was unusually lax. One sparkling exception was the U.S. Marine Corps, over 15,000 first-class troops. However, they were scattered throughout the Western Hemisphere in America’s possessions and in Central American republics, acting as police in the aftermath of the 1898 Spanish-American War.

Despite this bleak situation, and because the Germans had committed far too many acts of war, on April 2, President Woodrow Wilson requested a joint session of Congress. On April 6, the U.S. Congress voted overwhelmingly to go to war. The vote in the Senate was 82-6 in favor (with eight abstentions) and 373-50 in the House, with Jeannette Rankin of Montana in the minority. In 1941, she would become the only member of Congress to vote against declaring war on Japan after Pearl Harbor.

Yet, by June 1917, the commander of the American Expeditionary Force, General John J. Pershing, had arrived in France and on July 4, American Independence Day, elements of his 1st Division paraded in the streets of Paris. Throughout the following months, fresh units of an Army designed to reach a strength of 80 divisions – nearly 3 million men – continued to arrive. By March 1918, 318,000 men had reached France, the vanguard of 1.3 million to be deployed, and not a single one had been lost to enemy action in oceanic transport.

Rare are the times in great wars when the fortunes of one side are transformed by the sudden accretion of reinforcements. Napoleon’s enemies in 1813 when the Russian army joined Britain/Austria … the North in our Civil War when the adoption of conscription added millions versus the South’s hundreds of thousands … 1941 when Adolf Hitler’s stupid declaration of war on the United States, followed by Japan’s ill-advised action, saved an isolated Britain and an almost defeated Soviet Union.

This was another of those times, when Germany had declared unrestricted war in the Atlantic in the flawed calculation that the war would be over in Europe before the United States could mobilize.

As philosopher George Santayana so wisely observed, “Those who cannot remember the past are condemned to repeat it” and “Only the dead have seen the end of war.”

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Shortly After His Inauguration, Wilson Pivoted and Entered World War I

This World War I Tank Corps recruitment poster, issued by the U.S. government in 1917, sold for $8,962.50 at a July 2014 Heritage auction.

By Jim O’Neal

On Jan. 31, 1917, Germany’s Navy Admiral Eduard von Capelle assured his nation’s parliament, Americans “will not even come, because our submarines will sink them. Thus America from a military point of view means nothing, and again nothing and for a third time nothing.”

American President Woodrow Wilson had been re-elected just months earlier on a campaign slogan of, “He kept us out of war.” Although the Germans were regularly sinking American ships in the Atlantic, Wilson had consistently declared, “America is too proud to fight.” However, a month after his inauguration, he led Congress to vote to enter World War I.

The 1916 presidential election was almost as bizarre as the one we suffered through in 2016. In this case, an incumbent president (Wilson) was running against Supreme Court Justice Charles Evans Hughes, the Republican candidate. Wilson’s win was the first time a Democratic Party candidate had won two consecutive presidential elections since Andrew Jackson (1832).

But before the election, Democrats were so uncertain about their chances that they developed a radical plan to avoid leaving a potential four-month, lame-duck vacuum with war raging in Europe. It consisted of appointing president-elect Hughes (if he had won) as Secretary of State, followed by the resignation of Wilson’s vice president, Thomas Marshall. This would allow the new president to take residence in the WH immediately and avoid the gap until the scheduled March 1917 inauguration.

The Progressive Republicans had already essentially forfeited their chances by selecting Teddy Roosevelt for president and he had sent a telegram refusing their offer. The vice presidential candidate had already decided to support Hughes so that was out as well.

Admiral Capelle’s “they will never come” statement became one of history’s worst declarations when on May 29, the Allies launched a three-hour barrage of fire that exceeded what both sides fired during the entire four-year Civil War. The $180 million equated to $1 million of ordnance every 60 seconds. I suspect the folks in Afghanistan recently experienced something similar.

You can never tell about these American presidents.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

President Harding Entered Office on a High Note … then Came the Scandals

warren-g-harding-and-james-m-cox-absolutely-stunning-matched-pair-of-large-1920-rarities
This matched pair of Warren G. Harding and James M. Cox 1920 campaign buttons sold for $6,875 at a November 2013 Heritage auction.

By Jim O’Neal

The Republicans returned to power in the election of 1920 with the victory of Warren G. Harding of Ohio. Isolated even further in the confines of the White House, Woodrow Wilson and family waited out the year and the first two months of 1921. The outgoing president’s condition had stopped improving. He was feeble and mostly occupied with his books and papers, though he now lacked the mental acuity that was key to his greatness.

Late in his term, Wilson was awarded the Nobel Peace Prize and his spirits rose. Remorse yielded to genuine gratification, an indulgence he rarely allowed himself even in the good times. However, Edith Wilson found little diversion from this almost oppressive situation. The world was slowly passing the Wilsons by without a second glance.

The 1920 campaign had been dull and lackluster, with Harding remaining in Ohio on his front porch, greeting thousands of well-wishers and speaking to them informally. The Democrats had tried to make the League of Nations a campaign issue, but Harding’s position was too obscure since he was really only interested in preserving the Senate’s constitutional rights regarding foreign treaties. When voters got to the polls, politicians discovered the campaigns had not mattered. The people were so tired of government restrictions and hardships imposed by the war that they sought a complete change in administrations and a return to “America First.”

Harding and running mate Calvin Coolidge drubbed James Cox and Franklin D. Roosevelt in both the popular vote and electoral college (404 to 127).

Between the election and inauguration, Harding chose his cabinet, carefully balancing the membership with close political friends and leaders in the Republican Party. It was a blue-chip group that included Charles Evans Hughes (former governor of New York, Supreme Court Justice and presidential candidate in 1916) as Secretary of State; Secretary of Commerce Herbert Hoover; and millionaire Pittsburg banker Andrew Mellon as Secretary of Treasury. But there were also a few friends, like Albert Fall (Interior) and Harry Daugherty (Attorney General), who would become infamous for corruption.

Friends of Harding and Daugherty flocked from Ohio to Washington for jobs. Headquarters for the “Ohio Gang” was the “Little Green House” on K Street, where government favors and appointments were bought and sold. Evidence of Harding’s knowledge is sketchy; his friends just assumed he would agree in order to please them. But late in 1922, Harding learned of irregularities at the Veterans’ Bureau, where huge amounts of surplus materials were sold far below market value and in turn new supplies were purchased far above fair value, all without competitive bidding.

The head of the agency, Charles R. Forbes – one of Harding’s poker buddies – was allowed to resign, but the attorney for the Bureau committed suicide. This was soon followed by the death of another close Harding friend, Jess Smith, who shared an apartment with Daugherty and was a member of the “Ohio Gang.” Sensing trouble, Harding had asked him to leave Washington, however Smith shot himself to death. But the biggest surprise surfaced after Harding died of a heart attack in San Francisco in August 1923.

Secretary of Interior Fall had allowed two large federal oil fields in Elk Hills, Calif., and Teapot Dome, Wyo., to be opened to private oil companies. He was convicted of bribery ($400,000) and sent to prison. Attorney General Daugherty was brought to trial in 1924 for conspiracy in much of this, but refused to testify to avoid “incriminating the dead president” and it hung the jury.

How much Harding actually knew about the corruption among his friends will never be known. After his death, Mrs. Harding burned all his papers and correspondence, diligently recovering and destroying even personal letters in the possession of other people. Since she had also refused to have Harding’s corpse autopsied in San Francisco, there have always been rumors he was actually poisoned.

Ah, Washington, D.C. – such a small city, but with so many untold mysteries.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Transfer of Power Between Hoover, Roosevelt Tense but Peaceful

herbert-hoover-classic-ok-america-button
This “OK America!” button from Herbert Hoover’s 1932 re-election campaign sold for $2,500 at a September 2015 Heritage auction.

By Jim O’Neal

Herbert Hoover aspired to the presidency of the United States strictly for the opportunity to serve the public. When elected in 1928, he was universally recognized as the greatest living humanitarian. He helped organize the return of thousands of Americans stranded in Europe before the outbreak of World War I (taking no salary) and also directed the program for relief to millions of Belgians and French (after Germany invaded Belgium) as head of President Wilson’s Food Administration.

For several years after the war, he continued to serve without salary as Secretary of Commerce for presidents Warren Harding and Calvin Coolidge until he resigned to run for president in 1928. He won by a large margin and in his inauguration speech on March 4, 1929, he described the future of the country as being “bright with hope.”

Three and a half years later, Republican prosperity had vanished, beginning with the stock-market crash seven months after Hoover took office. Protesting veterans of the Bonus Army were camped out in sight of the Capitol and milling around the White House to display their frustration and bitterness.

Hoover was on a tour of the Midwest the day the stock market crashed. For seven rainy days, he plodded from town to town on his train, proclaiming prosperity to anyone willing to listen. He arrived home on Oct. 4, 1929, and at a press conference the next morning, he assured newsmen the country’s businesses stood on a solid foundation.

Days later, on Oct. 19, Black Tuesday, the stock market fell sharply, but the president earnestly believed this was only a tough patch, like the Panic of 1907. Like most people, he seems to have had little idea of how bad the worst would be. The plan he presented to Congress in December was totally unorthodox by calling on the federal government to save the day through a series of programs that included education reform, housing for the underprivileged, jobs in long-term construction, lower taxes and a balanced budget … while making government more effective and efficient.

To add to the gloom of 1929, the Executive Office burned to its walls on Christmas Eve as carolers serenaded. The destruction of the Executive Office was a better symbol for the Hoover presidency than the White House, since virtually all the programs failed and the country started a downward spiral that would continue until we had to gear up for the next world war.

In the summer of 1932, Franklin Delano Roosevelt was nominated by the Democratic National Committee in Chicago. On Aug. 11, Hoover formally accepted the Republican nomination that had been offered several months earlier. But he chose to bury himself in work for the balance of August and all of September. By then, the Democrats were in full stride and FDR became the president-elect.

However, the transfer of office from Republican to Democrat was chilly. At best, the feeling between the two men was of mutual contempt. The Hoovers declined to host the traditional March 3 dinner for the incoming president, and the Roosevelts had no intention of attending. Hoover was frustrated that FDR did not accept any of his advice and Roosevelt had grown weary of listening. (This would lead to changing the inauguration of March 4 to January 20, since it was too long to have a lame duck badgering the new guy.)

A small awkward tea ceremony was finally negotiated and that was that. A quiet, peaceful transfer of the most powerful political office in the world.

Jim O'NielIntelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].